Hikvision again sees phenomenal growth in 2013 & 2014

Hikvision Digital Technology has experienced significant growth over the past two years. 2013 and 2014 have been especially meaningful to the company, with the sales growth rate reaching more than 100 percent for the overseas market. a&s explored what is behind the success of Hikvision and how it pictures itself in the world market in the future.

Hikvision Digital Technology marked another milestone in its own history to be ranked third in Security 50 rankings, 2014, as conducted by a&s International. According to the report, in 2013, Hikvision reached a new sales record with a total revenue of US$1.6 billion and 53.2 percent growth rate. And in the first half of 2014, Hikvision also gained $1 billion in sales revenue with 53.9 percent growth, while for the overseas market the sales growth rate reached more than 100 percent. “The success can be attributed to the company's long-term commitment toward product strategy and customer services in the worldwide markets, and also proves that Hikvision starts to receive considerable returns after years of efforts in overseas markets,” said Keen Yao, International Marketing Director of Hikvision Digital Technology.

Increasing Global Demand for Multiple HD Solutions
The requirement from customers is very clear: they want a high resolution video system but at a more affordable price. No matter an analog or IP system, the mainstream now is HD. However, the customer's choice toward specific HD solutions is still varied. “For example, HD-over- coaxial solutions are welcomed, particularly in developing countries, like APAC, Latin America; even in the U.S. and Japan,” Yao said. For IP video surveillance solutions, the growth momentum is now in the small and mid-sized business (SMB) sector. SMB customers have a very clear demand for clear images, and they want the systems to be easy to use, install, maintain, and also affordable. For SMBs, to fully meet their actual requirements is much more important than introducing high technologies to them. However, for large-scaled projects, customers want more smart (intelligent) video functions to fulfill their needs in order to mitigate different threats. Meanwhile, in this sector, there is always a large demand towards large storage and high bandwidth, which explains why H.265 compression technologies will be the future, according to Yao.

Therefore, Hikvision now offers complete HD product lines and specific sales strategies tailored for different market segments such as smart IP solution, easy IP solution, and turbo HD solution, etc., to meet different requirements from customers and projects. Systems, which adopt new technologies of 4K and H.265, and upgraded VCA and VMS, should be ready for the market by the end of next year, said Yao. Next, Hikvision's ambition is to provide total solutions for its worldwide customers.

High Penetration in Verticals
Developing solutions for verticals has also been the main key in Hikvision's long-term commitment toward its customers. Hikvision has been recognized in many large-scale projects, ranging from transportation, industrial, residential, city surveillance, financial institutes, retail, and education, in the overseas markets. Some significant projects of Hikvision recently include the installation of over 750 units of Hikvision 2-megapixel network dome cameras in Seoul, Korea, valued at $1.6 million; and a housing facilities project in New York, U.S., with over 5,000 video stream channels. Other projects include Tesco in the U.K., Mineirao Stadium for the World Cup in Brazil, and multiple top luxury hotels in the Middle East. Besides, Hikvision has vast domestic market for vertical applications, which provides all the necessary elements and valuable experience for them to explore vertical markets in overseas market.

Not only for security, Hikvision's solutions also help achieve management purposes. For example, it has a solution for financial management. In China, for certain investments, banks must tell people about the risks before they sign a contract. The solution is at the desk and allows the bankers to record them telling the customers about the risks before signing. This allows them to have records just in case an investment goes bad and the customer comes back to claim they were not warned about the risks.

In another case, Hikvision worked on a special project for the Prison Administrative Bureau of Liaoning Province, China, where they were also involved in the policy writing regarding how to manage the prison system. The prison project, while security was definitely a key, access management was a main requirement. In certain parts of the prison the doors can only be opened if there are at least two people present. Therefore the solution included sensors that can tell how many people are at the door. If there is only one person, the doors will not open. If there are at least two, access is granted. According to Yao, this type of management system can now be provided to other environments such as vaults in banks.

With all the achievements in worldwide markets, Hikvision now has become a multinational in the security industry that is able to supply professional video surveillance solutions to customers.

Enhanced Localized Services and Partnership
As of the end of 2014, Hikvision has around 16 branch offices around the world. The company aims to reach 20 offices by the end of 2016. By means of these branch offices, Hikvision is able to provide more localized services and support to its regional markets, which explains the company's high growth in overseas markets. Yao said the company's management style is more centered in each local regional office; they are well supported by warehouses, logistics centers, pre/after-sales service centers, and others. Hikvision recently expanded its warehouses in Amsterdam and the Americas, such as in Brazil and the U.S., to make sure product supply is instant to its local markets. In the U.S., Hikvision also set up a calling center and repair center to provide more efficient customer service and technical support. In addition, “We work very closely with our partners to win the trust of our customers and projects. In the U.K., working with our distributors, we launched ‘Added-Value System Partner — AVSP' Program to group distributors and systems integrators together for more support in technology and direct conversation,” said Yao.

Next for Hikvision: 4K & H.265 Technologies
Looking to the future development of Hikvision, there are three major directions. First, in security, Hikvision will continue in its leading position in technology to develop complete 4K and H.265 video surveillance systems. According to Yao, although HD is the mainstream, due to customers' increasing demand toward high picture quality, 4K has a huge potential to grow in the future, especially in the large-scale projects and high-end applications. Once the middle market is ready to adopt more 4K, it will become the mainstream. At that time, H.265 will also become much more crucial for users to keep low bandwidth while maintaining smooth video streaming.

Meanwhile, the company will also continue to upgrade their VCA and VMS products. As VCA becomes more and more important in the security industry, many new applications and markets will be opened up; especially in smart cities. “With VCA, structured security video data can be created. Then through integration with other metadata, we can acquire more valuable information to increase the extra values of a solution, such as ITS and public safety, which is also something that Hikvision would like explore more in the near future,” said Yao.

In regard to access control, Hikvision currently provides total solutions for intelligent building systems, which includes access control and video surveillance. “We also see that integration drives the market demand,” Yao said. “It is a must to integrate access control with video surveillance and alarms, which can be seen in the building automation sector which requires total solutions. Therefore, to become a total solution provider, Hikvision will soon launch access control products in the near future to the overseas markets.” In addition, the company also actively seeks new opportunities in the home security sector, with its EZVIZ brand. The company will first focus on some mature markets, like the U.S. and Europe, to roll out its products. In addition to being an equipment provider, Hikvision is also a service provider in China and has partnerships with some major Internet service platform providers, such as Alibaba, Baidu, and Tencent. Based on the Chinese business model, we can expect Hikvision might do the same in the overseas market in the near future.

Going Beyond Security
Hikvision has successfully transformed into a solution and service provider with a global presence. Its strong technology background will continue to drive the company to explore more markets. With all its recent plans, we can picture how Hikvision will grow beyond security for other video applications.